RBA unlikely to play Santa with rates cut

Reserve Bank assistant governor Guy Debelle has told a Sydney conference that mortgage rates are about where he wants them to be, suggesting there will not be another rate cut this year.

Transcript

TICKY FULLERTON, PRESENTER: The retailers may be crying for an interest rate cut, but the Reserve Bank doesn't look like it'll be playing Santa.

At a Sydney conference, assistant governor Guy Debelle said the mortgage rates are, "... about where we want them to be, otherwise we'd do something about mortgage rate competition."

He also commented on the introduction of covered bonds, where banks use deposits as collateral to raise funds, saying there needs to be a limit on the number issued.

GUY DEBELLE, RBA ASST GOVERNOR: The introduction of covered bonds does subordinate unsecured debt holders to a degree. Any pricing gain obtained from issuing covered bonds is likely to be offset to some extent by a demand from unsecured debt holders for more compensation in the future.

TICKY FULLERTON: He sees unsecured bonds as best suited to broadening the bank's investor base rather than a means of reducing overall funding costs.